Why November 2018 Was a Bad Month for Cryptocurrency
November 2018 had crypto investors terrified. Nearly $70 billion in value disappeared, leaving investors with a lot of crypto with second thoughts about their future in the market. December of 2017 saw Bitcoin’s value at nearly $20,000, a fantastic way to wrap up the year. With Bitcoin’s value at the end of November 2018 falling far below expectations at less than $4,000, people began to panic. How did we get here?
The decline in value affected more than just Bitcoin. Almost every cryptocurrency failed to meet expectations, some of them sinking beneath what investors considered to be their “floor”, the lowest point they were capable of reaching. The market is changing, and it’s the result of many factors coming to a head.
For one, people who were only casually interested in crypto that didn’t really understand what they were doing started to drop off the market. This is common with casual investments around the holidays, where people are looking to sell off what they have to fund expenses around Christmas. This alone wouldn’t be enough to profoundly affect the market to the degree that it did — the impact is much larger because of the competition surrounding Bitcoin mining.
Bitcoin Miners Took a Step Back and Made the Problem Worse
There’s serious money to be made in Bitcoin, and tech savvy companies know that. They’ve created huge mining warehouses to harvest as much Bitcoin as humanly possible. Their demand for equipment has driven up the prices of key components for creating bitcoin mining rigs.
The cost in equipment and energy versus the potential reward was disheartening to people who casually mine or run smaller mining operations. Most of them up and left the picture, leaving the mining to the major mining farms. Their exodus was felt because in larger numbers, they accounted for more of the mining than they realized.
Is it a Bad Time to Invest?
It’s not necessarily a bad time to invest in crypto. The value has already begun to rebound, making it slightly more affordable to invest now than it was before. Use your best judgement and only do what you feel comfortable doing. There’s a reasonable chance that it’s a good time to invest if you intend to hold onto Bitcoin for a while. Get it at a lower value while everyone is still a little hesitant. Over time, the value will build again. If you’re not comfortable, wait it out.